Correlation Between Embotelladora Andina and Cresud Wnt

Can any of the company-specific risk be diversified away by investing in both Embotelladora Andina and Cresud Wnt at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Embotelladora Andina and Cresud Wnt into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Embotelladora Andina SA and Cresud Wnt, you can compare the effects of market volatilities on Embotelladora Andina and Cresud Wnt and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Embotelladora Andina with a short position of Cresud Wnt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embotelladora Andina and Cresud Wnt.

Diversification Opportunities for Embotelladora Andina and Cresud Wnt

0.0

Correlation Coefficient

Embotelladora Andina  Cresud Wnt

Pay attention - limited upside

The 3 months correlation between Embotelladora and Cresud is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Embotelladora Andina SA and Cresud Wnt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud Wnt and Embotelladora Andina is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Embotelladora Andina SA are associated (or correlated) with Cresud Wnt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud Wnt has no effect on the direction of Embotelladora Andina i.e., Embotelladora Andina and Cresud Wnt go up and down completely randomly.

Pair Corralation between Embotelladora Andina and Cresud Wnt

If you would invest (100.00) in Cresud Wnt on October 9, 2024 and sell it today you would earn a total of  100.00  from holding Cresud Wnt or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Embotelladora Andina SA  vs.  Cresud Wnt

Embotelladora Andina

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Embotelladora Andina SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Cresud Wnt

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Cresud Wnt has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Cresud Wnt is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Embotelladora Andina and Cresud Wnt

The main advantage of trading using opposite Embotelladora Andina and Cresud Wnt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embotelladora Andina position performs unexpectedly, Cresud Wnt can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cresud Wnt will offset losses from the drop in Cresud Wnt's long position.

The idea behind Embotelladora Andina SA and Cresud Wnt pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.